Workers of Addax Petroleum Development Nigeria have embarked on strike in protest against anti-labour practices by the firm, causing possible reduction in Nigeria’s crude oil production by 22,000 barrels per day.
Addax, owned by China’s Sinopec Group, has four Oil Mining Licenses, OML 123, 124, 126 and 137, and operates the assets in Production Sharing Contract with the Nigerian National Petroleum Company Limited.
The company has about 324 Nigerian employees, which include 141 permanent staff and 183 contract employees.
The workers, who are members of the Petroleum and Natural Gas Senior Staff Association of Nigeria, stated that Addax management refused to engage them on labour related issues after the announcement of the revocation of its licenses by the Federal Government.
They threatened to shut all the company’s operations including oil wells, valves crude lifting, and export terminals operated by Addax if the company fails to engage them, adding that all attempts to get the management to the negotiation table had not yielded desired results.
They stated that sequel to the notification by the APN management informing its employees on the withdrawal of operating licenses by the NNPC in a town hall meeting, both parties met and reached a financial term of exit settlement for all the workers.
It was learnt that both parties agreed that the financial exit settlement would be executed at the expiration of Addax Petroleum Nigeria’s PSC agreement for OML 123 and 124 by July 1, 2022.
But according to the PENGASSAN members, Addax management had so far rebuffed the call for the execution of the financial exit settlement and other employees’ related issues.
The Senior Assistant General Secretary, Lagos Zone, PENGASSAN, Babatunde Oke, confirmed that the strike was embarked upon by the association’s members due to the Addax management’s refusal to engage the oil sector union on the financial settlement earlier agreed on.
Addax has been enmeshed in revocation of licenses by the then Department of Petroleum Resources in March 2021.
The regulatory agency claimed that the licenses were revoked due to refusal of Addax Petroleum to fully develop the affected assets, and that this action had robbed the government of revenue that could have been generated from assets. The DPR, now Nigeria Upstream Petroleum Regulatory Commission, claimed that the average reserve profile of the assets showed that oil reserves had remained essentially flat, as Addax never made efforts to grow the reserves, adding that crude oil in all three producing assets had been declining over the years due to inadequate investment by the company.
It stated that the entire OML 137 held about five trillion cubic metres in two key reserves, but the company failed to develop this asset in line with the government’s gas revolution policy, describing this as economic sabotage.
The revocation was recently confirmed by the current Chief Executive Officer, NUPRC, Gbenga Komolafe, who reiterated that Addax refused to renew its licenses and therefore those licenses stand revoked.